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Egypt aims to issue EGP 146bn debt instruments in February

Egypt aims to issue EGP 146bn debt instruments in February
Egypt's Ministry of Finance (MoF) plans to issue EGP 146 billion in debt instruments in February 2019

Cairo - Mubasher: Egypt's Ministry of Finance (MoF) plans to issue EGP 146 billion in debt instruments in February 2019, coinciding with the recent drop in yields on treasury bills (T-bills) and treasury bonds (T-bonds).

According to the plan, the MoF aims to issue EGP 6 billion T-bonds and EGP 140 billion T-bills next month.

On Monday, yields on T-bonds sold in an auction went down to the lowest level since June 2018.

Month-on-month, target issues for T-bills and T-bonds for February declined from EGP 181.5 billion as estimated in January.

Foreign investors returned to government debt issuances in January following the New Year and Christmas holidays. Since the beginning of 2019, foreign investment inflows accounted for about 30% of T-bills, and about 55% in five-and ten-year T-bonds.

It is worth mentioning that foreign investment institutions made up 100% of the five-year T-bonds issues on Monday.

Egypt plans to reduce government debt to 92% of the country’s gross domestic product (GDP) in fiscal year 2018/2019, while also targeting the financing of the public budget by EGP 511.2 billion.

Previously, the most populous Arab nation said it was planning to issue T-bills worth EGP 409.6 billion and T-bonds valued at EGP 101.6 billion in the current fiscal year.

A week ago, the Central Bank of Egypt’s (CBE) governor Tarek Amer expected the Egyptian pound’s exchange rate to see some volatility, following the shutdown of the system allowing foreign investors to repatriate dollars.

According to a survey by Mubasher, the North African nation has borrowed nearly EGP 1.858 trillion ($103 billion) from local banks in 2018 through the issuance of government debt instruments.

Egypt’s foreign debt increased by 2.3% to $80.8 billion in the first quarter of FY 17/18, compared to $79 billion in the prior quarter, CBE data showed.